Matthew Sag

This post is a recap and extension on my post about eBay from a couple of days ago. I have learned a lot since that post, much of it from comments and emails. Thanks to everyone who provided helpful information!

The Brick Scam

The Brick scam works as follows: overseas criminals use remail services to disguise their identities and pretend to be residing in the United States. These criminals buy valuable or easily tradable items such as an Apple iPhone on eBay auctions, falsely claim that the item is damaged or wrongly described, insist on returning the item, but instead return something else entirely worthless. Sometimes it is a brick–thus the name–in my case it was a worthless Samsung phone from last century.

Why does the Brick Scam work?

eBay recently instituted a “Buyer Protection Program” which essentially compels eBay sellers to accept returns regardless of whether they have indicated a willingness to do so or not. This practice is deceptive .

eBay’s “Buyer Protection Program” resolves disputes between buyers and sellers in favor of the buyer by default, essentially unless the buyer admits dishonesty. In effect, there is no way for the seller to prove that buyer sent back a brick rather than an iPhone. The criminal thus obtains a refund from eBay and gets to keep the item as well.

Although the immediate cause of this problem is fraudulent buyers, eBay plays a significant role. Sellers on eBay are induced into a vulnerable position by eBay’s misleading practices and the fraud is made possible by eBay’s “Buyer Protection Program” enforced on sellers as a contract of adhesion.

This is what happened to me

In October sold a very slightly used iPhone 6S on eBay, received payment and promptly shipped the phone. The buyer waited a few days after receiving my iPhone and then contrived a disagreement claiming that the phone was damaged and not as described. Although I did not agree to accept returns when I listed the item, in part to protect myself against unscrupulous buyers, I soon learned that eBay forces you to accept returns.

By appearing to give me the option to not accept returns and then forcing me accept returns eBay exposed me to the very kind of fraudulent conduct I had tried to avoid. I believe that eBay’s conduct in this regard is deceptive and, notwithstanding terms and conditions buried in the fine print of eBay’s terms and conditions, I was deceived.

On November 14, 2016, I received this package from the Ukraine with a customs declaration describing the contents as “phone used”. Occasionally you might read the description “suspicious looking package” in the media wondered what exactly makes a package look suspicious? It looks like this:

Given that I had shipped the iPhone to an address in Delaware and that my address on Lake Shore Drive in Chicago was written as “LK Shr Dr” I was immediately suspicious. I took photos as I unboxed the packaged and I did so in the presence of a witness. The phone that I received to replace my mint condition gold iPhone was a beaten up old Samsung. I didn’t even know Samsung made phones like this – it looks almost exactly like an old Nokia that I had in 2002.

I thought I was dealing with a verified buyer in the US because that is what eBay and PayPal told me and I don’t accept international bids (to protect myself from fraud!). I now realize that the buyer’s address was just a box at a remail service, Ukraine Express.

Ukraine Express’s address comes up with a number of fraud related posts when you type it into Google.

The buyer in this story trades on eBay under the name “plasmacompany” and claims to be Dmitriy Dubogray, doing business as ITG EXPRESS, 78 McCullough Dr # 11051, New Castle, DE 19726-2079. But according to PayPal, the buyer is Vadim Grebenyk ‏(Vadex1960@gmail.com). 78 McCullough Dr., New Castle DE 19726 is the office of Ukraine Express, a remailer. Ukraine Express may be ignorant of  the fraudulent transactions that pass through its doors. Maybe?

eBay’s dispute process feels like a shell game

I tried to raise all this with eBay. I explained that the buyer had returned a worthless 10-year-old phone in exchange for the mint condition iPhone 6 I had sold. I offered to provide pictures.

I didn’t know about the Brick Scam when this happened. I did not know about remail services either. But eBay surely knows about such things! So I still can’t understand why when I told eBay that received a worthless peice of plastic for my $465 iPhone from the Ukraine, and they could see by the USPS tracking number (RF611652494UA) that I was right, why they would side with the buyer over me.

On November 25, eBay “resolved” this case in favor of the buyer with the following explanation. “The item has been delivered to you. eBay Customer Service is refunding the buyer and debiting your PayPal account for reimbursement. We understand how frustrating it is that the items condition changed but, unfortunately, we didn’t receive proof that the buyer caused the issue.”

Really? Could they possibly realize how frustrating this is? 

In addition to this galling faux-sympathy, what this note does not explain is that eBay never gave me any opportunity to submit any proof of buyer fraud.

To cut a long story just a bit shorter, on November 26, 2016, I attempted to appeal this decision. I was not successful. eBay sent me several messages demanding payment and eventually extracted $424 from my PayPal account despite my protests.

Public Reaction

A couple of days ago I posted about this experience . The post attracted some attention on twitter and was reposted to Ycombinator’s Hacker News forum. The comments on that site were illuminating as were many posts on twitter and several direct emails. Thanks!

From these comments I learned about the Brick Scam.

“As in ‘you can’t sell apple stuff on ebay anymore because of the brick scam’. Usually, they send you a return package with a rock or brick inside approximating the weight of the original package. Its famous enough at this point that its impossible that ebay is unaware. They are fully aware and are choosing to continue to profit off of this. So much so that the “shell game” the author faced is likely scripted by this point.” Comment on Hacker News

I also learned that many people believe that eBay doesn’t have much interest in preventing fraud on small sellers.

“Ebay consumes sellers as a raw material as part of the process.” Same comment as above on Hacker News

“I used to work at eBay Trust and Safety. The place is a nightmare and will not improve. … This kind of fraud sticks out like a sore thumb in click stream. I had no trouble finding fraud and building algorithms to automatically detect it but I did find it impossible finding someone at eBay who cared enough to do anything about it. eBay still gets paid so no one wants to be in charge of a revenue hit. I doubt that’s changed.” A different comment on Hacker News

Thanks to that public reaction I got a very polite call from eBay today  informing me that it would reverse the outcome of my case and issue a refund.

What should be done?

I am writing to the Illinois Attorney General’s Consumer Fraud Unit to ask them to investigate. Obviously the chances to catching up with Vadim Grebenyk are slim to none, but I am hoping to convince them to attack this problem upstream.

I also hope that eBay is genuinely interested in looking after small sellers and that we are not as disposable as this process made me feel.

So, eBay, if you are still reading, I have some suggestions.

• eBay should make it clear to sellers that they will be forced to accept returns, no matter what; and that either (i) there is no way for a seller to prove they received a brick in the mail as opposed to the valuable item they sold, or (ii) how to establish such proof.
  • People online have suggested video-taping your return unboxing, but I don’t think they would accept that as proof either.
• To combat remailer fraud eBay should give the seller the benefit of the doubt whenever the shipping address for a return does not match address to which the item was shipped.
• Also, sellers willing to pay for such a service should be able to insist that items are returned through a domestic pack and ship service to prevent fraud.
• Finally, eBay should proactively identify remail services and block accounts using those services.

What am going to do with the money?

Was it worth the time and frustration to get back $400? Not really. To prove to myself that I don’t care about the money I am going to take the money eBay refunds to me and donate it to Doctors Without Borders.

If you live in an economy where officials are corrupt, contracts are hard to enforce, and trust is scarce, everyday transactions are burdensome and time-consuming. If you don’t want to get scammed, you either deal with people you know, people your relatives know, or you deal with repeat players who have an interest in their reputation. Lack of trust makes market small and transaction costs high. The wonderful thing about eBay when it first arrived was that it freed so many people from the tyranny of small markets. eBay provided a marketplace where trust was built on reputation and feedback and the size of markets was only constrained by the cost of shipping. Recently, however, eBay has reengineered its services so that buyer trust is based on a seemingly absolute guarantee that the seller will always lose in any dispute.

No one should be surprised that unscrupulous buyers use eBay to commit fraud on unsuspecting sellers. What surprised me was the extent to which eBay now facilitates this fraud through its “buyer protection program”. In October this year I listed a very slightly used iPhone 6S for sale on eBay and was quite satisfied when it eventually sold for $465. This satisfaction was short-lived, however, as I came to realize that I had been taken in by an eBay scammer.

I shipped the iPhone on October 17 via UPS almost immediately after receiving full payment in my PayPal account. I had the money, so I assumed everything was going to be fine. Everything was not fine. The buyer waited a few days after receiving the package and then fabricated a disagreement claiming that the phone was damaged and not as described. The delay and the his outlandish claims made me suspicious, but I offered to refund 5% of the value of the transaction just to make him go away and preserve my good seller reputation.

The seller immediately rejected my refund offer and made a return request. I am not completely naïve. I don’t accept payment by check or Western Union and I don’t accept returns. So I was pretty surprised to find out that eBay could force me to accept a return request – eBay explained that my options were to refund the buyer and let him keep my phone or approve the return request. Grudgingly, I accepted the return. On November 2, eBay instructed me to refund the buyer when the return was delivered. On November 4, eBay invoiced to me $46.53 for the listing and sale, which I paid.

Occasionally you might read the description “suspicious looking package” in the media wondered what exactly makes a package look suspicious? It looks like this:

On November 14, I received this package from the Ukraine with a customs declaration describing the contents as “phone”. Given that I had shipped the phone to an address in Delaware and that my address on Lake Shore Drive was written as “LK Shr Dr” I was immediately suspicious. The phone that I received to replace my mint condition gold iPhone was a beaten up old Samsung (I didn’t even know Samsung made phones like this – it looks almost exactly like an old Nokia that I had in 2002).

The same day the bogus return arrived, I received an instruction from eBay commanding me to issue a refund. At this point I knew with absolute certainty that there was no way I was going to win this fight. I didn’t understand how but it was obvious that the seller had gamed this through to the end. That he knew how to play the system was evidenced by the fact that his bogus return arrived just one day too late for me to revise my review and warn others not to do business with the user called plasmacompany.

On November 18, more out of curiosity than anything else, I entered into the bizarro world of online dispute resolution and opened up a case with eBay. I explained that the buyer had returned a worthless 10-year-old phone in exchange for the mint condition iPhone 6 I had sold. I offered to provide pictures.

On November 25, eBay “resolved” this case in favor of the buyer with the following explanation.

• “The item has been delivered to you.” A lie.

•  “eBay Customer Service is refunding the buyer and debiting your PayPal account for reimbursement.” Actually the money is still in my PayPal account.

• “We understand how frustrating it is that the items condition changed …” 1. I sincerely doubt that they do understand. 2. “Changed” does not really do it justice when an iPhone 6S magically transforms into a beaten up old Samsung from the early 2000’s. 3. There should be an apostrophe after item (item’s condition).

• “…  but, unfortunately, we didn’t receive proof that the buyer caused the issue.”  Well, of course eBay did not receive any proof, eBay is entirely uninterested in allowing you to submit proof of buyer fraud.

On November 26 I attempted to appeal this decision. This involves calling eBay, a Kafkaesque experience I can’t honestly recommend. The initial telephone message I received told me that the buyer had appealed and that no action was required of me at this time. Utterly confused, I kept at it until I was able to speaking to an actual person who then explained to me that because eBay does not handle the item directly they have no way of knowing who is telling the truth. A fair point, except that my shipping documents prove that I sent an iPhone (I used UPS pack and ship) and the return documentation simply says “phone” and was shipped from overseas. These two facts alone are incredibly suspicious. The eBay representative offered to connect me with a risk management team, but my call was simply routed back to customer service who transferred me to the appeals department. The notes I took at the time say “this feels like a shell game” and nothing since has altered my view.

I did get to speak to someone in the appeals department eventually and she told me that they could not grant an appeal because they had no proof. But of course, everything about this process is designed so that you have no chance to submit any proof. They did offer that I could report the buyer and that the buyer would be investigated. I did, but I doubt anything will ever come of it.

I had assumed that eBay would simply take the money from my PayPal account, but they don’t seem to have the power to do that. (I upgraded all my passwords after the election at the urging of my more security conscious friends.) So, eBay continues to insist that I pay my “eBay money back guarantee case” and they have helpfully suggested that I should add my reimbursement payment method to my personal information. Hah! Fat chance that I am every letting eBay near my PayPal account again.

eBay maintains that as a seller, I agreed to permit them to make a final decision in their sole discretion on any case the buyer opens with eBay under the eBay money back guarantee policy. I have no recollection of making this agreement, this is not a term I would have agreed to knowingly, and I have seen no evidence that I made such an agreement. I’m beginning to suspect that eBay is not being entirely straightforward here.

The slightly tangential way eBay describes things makes me think that they don’t think I have a legal obligation to defraud myself either. My account balance as of December 2, 2016 was $0, even at the same time that eBay is demanding a payment of $465.26. I tested this by trying to make a payment of $0.01 into my account.

If I really owed them this money, wouldn’t they reflect it in my account balance? Maybe this is just paranoia, but when an organization you used to trust takes the side of the fraudsters and the con-artists you begin to question everything they say.

I did not agree to accept returns for the sale when I listed the item. I don’t recall agreeing to eBay’s unilateral money back guarantee system. I suspect that I never agreed and that eBay is trying to confuse me into paying for a fraudulent refund. eBay is misleading sellers like me who would find a another marketplace rather than participate in one where they will be forced to accept returns and grant refunds in the face of transparent fraudulent activity.

eBay is an enormous company with over $8 billion in revenue a year, so naturally it’s difficult to talk to anyone there who is not a computer (or a human whose responses are so routine and uncomprehending that they may as well be a computer). I figure that if I continue to ignore their demand for payment things might eventually escalate to the point where I get to speak to an actual human.

For the record, the buyer was using the name “plasmacompany” on eBay but according to PayPal he or she is really Vadim Grebenyk ‏(Vadex1960@gmail.com) doing business as ITG EXPRESS, with a shipping address of 78 McCullough Dr # 11051, New Castle, DE 19726-2079, United States. According to eBay, the buyer’s name is Dmitriy Dubogray. Same company and address. There may be a real Vadim, or Dmitriy or ITG Express whose names have been appropriated by some fraudster. If so, sorry to drag you into this.